Is a cheaper, ad-supported Kindle Fire on the way?

Amazon is trying to sell ads that would appear on the Kindle Fire’s welcome screen, AdAge reports, at prices of at least $600,000 for a two-month campaign. Does that mean a cheaper, ad-supported Kindle Fire is coming soon?

Amazon already sells ad-supported Kindles at a discount. The cheapest Kindle is $79 with ads or $99 without. The Kindle Touch WiFi is $99 with ads or $139 without. The Kindle Touch 3G is $149 with ads or $189 without.

AdAge cites executives who seem uncertain about whether the ads Amazon wants them to buy would be used on a discounted Kindle Fire or just thrown onto the regular version. One unidentified exec says, “You’re already paying a premium for the product and then having that unexpected ad experience makes for a worse consumer experience. There needs to be a value exchange.”

Amazon has likely already thought of that. The company prides itself on customer service above almost anything else, and it probably wouldn’t start including ads on the Kindle Fire without a widely promoted discounted price. The Kindle Fire software is probably already able to support ads (since on the ad-supported Kindle e-readers you can pay $30 to turn the ads off) so Amazon wouldn’t have to launch an entirely new Kindle Fire model to have it be ad-supported.

All the company has to do is decide how much cheaper an ad-supported Kindle Fire will be. The Kindle Fire is $199 now. The company could knock off $30 or go for a bigger discount in preparation for the 2nd-generation Kindle Fire rumored to launch later this year.